The interactivity is far, far more than simple indexing and glossary-lookup. I downloaded Apple's "Yellow Submarine" book a month or two ago. (Looking back on it, it's obvious that they were putting blood in the water for iBooks Author.) Every page had interactive elements; I could tap on an image and a relevant song would play, or a video, or a picture that was interactive, not static. If I recall correctly, the iPad would have read the book out loud.
I've downloaded iBooks Author and am looking at it now. You can add interactive images, image galleries, movies, audio, review questions, Keynote presentations(!), interactive 3D objects, and HTML.
I'm a college physics instructor; I am salivating at the potential of this for a physics textbook. What if my students could, for example, tap on the each of the terms in a conservation of momentum equation (as an interactive graphical element) and the book would tell them the physical meaning of each symbol, and then run a movie showing (say) a collision of two objects (elastic? inelastic? 1-d? 2-d?). Or have a 3-d plot of an electric field that they could rotate right there in their textbook? How about have the relevant (and CURRENT) Wikipedia article pop up INSIDE their textbook? Did a topic get out of date ("hey, we found the Higgs a week after you published your textbook!") No problem, a quick update and the new info is in the book!
I agree with another poster, at this time I cannot justify requiring an iPad (or anything technological that my school doesn't provide), but I definitely see this style of textbook--on whatever platform--as the future. As long as e-texts are simply photonic versions of paper books, I see little value in them. But add this interactivity, and...the possibilities to really transform student learning are breathtaking.